Posted on April 2nd, 2007 by Jonathan Dalton

Everyone is familiar with the Bill of Rights, in concept if not in the particulars. These 10 constitutional amendments were written in an effort to protect the best interests of the public at large, particularly from those specific items from British rule that were considered most onerous.

But what if the Bill of Rights had been written by a different group, say the various state governors. And rather than protecting the rights of the public, they were designed to promote the governors’ private yearnings for power under the guide of the public good.

Such is what you have with Redfin’s latest publicity stunt, the “Real Estate Consumer’s Bill of Rights.” This document is less a call to action in defense of the real estate consumer than a 10-paragraph justification and beatification of Redfin’s particular business model of rebating a portion of the buyers’ commission back to the buyer.

Some excerpts:

4. Know what services your agent will provide: Much of the work of a buyer’s agent begins after the buyer has agreed to buy a house. This work includes coordinating inspections, repairs, mortgages, title reviews and escrow services. But agents today are paid only to bring a buyer to a transaction.

Not true. Agents are paid for guiding a client through the transaction from finding the right house to negotiating the sales price to the inspections to the close of escrow. But Redfin prefers to ignore the initial steps as this is a service they prefer the buyers handle on their own.

5. Have an agent that represents only your interests: Most states allow an agent to represent the buyer and seller in one transaction, and get both sides of a commission. As a result, some sellers’ agents are on the prowl for unrepresented buyers to bring to the seller. It’s a solicitation neither side can easily refuse because the seller wants the buyer and the buyer wants the house.

On the prowl? Skipping the silliness of the language, this ignores the basic reality that buyers call listings agents (rightly or wrongly) believing they’re going to get a better deal on a property. Redfin’s not alone in arguing buyers ought to be represented; they just want to make sure they’re represented the Redfin way.

6. Know the commission refund you can get before you buy a house: Depending on the service provided by the buyer’s agent, some sellers vary the commission offered to buyers’ agents. This flexibility is good in theory, but in practice it’s often used to thwart commission refunds.

No, it’s done as a service to the seller. Redfin imagines itself the victim when it truth it’s not a factor.

10. Be sure your agent will show your house to everyone: Some sellers’ agents selectively refuse to show houses to a buyer represented by an alternative brokerage, which hurts the seller and the buyer.

Again, Redfin as the victim. What Redfin actually is referring to is sellers’ agents who will not pay Redfin a co-brokerage commission for its limited role in a transaction. If you are being represented by an agent, the agent should be the one showing you the property.

Will I show my listings to someone who calls even if they disclose up front that they are working with another agent? Yep. Will I pay that agent from my negotiated commission with the seller? Probably. Would I pay an agent who steps in after the point and claims a relationship with the seller that wasn’t disclosed before I showed a property and added value by answering questions about the home, etc? Probably not.

In general, the idea of a Real Estate Consumer’s Bill of Rights is sound. But coming from an entity which has been nothing if not entirely self-serving in its brief existence - change as an addenda for the sole purpose of personal profit - it falls short of meeting its stated goal.

Some real estate bloggers had advanced notice on the announcement and you can read their views, and others, here:

• Bloodhound Realty: Redfin.Com’s Consumer Bill of Rights … a Wolf in Sheep’s Clothing
• Rain City Guide: The Real Estate Bill of Rights
• 3 Oceans Real Estate: Redfin Launches Consumers’ Bill of Rights
• Future of Real Estate Marketing: Stand Up and Be Heard

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Categories: Real Estate Blogging, General Real Estate, Tips for Sellers, Tips for Buyers, Technology